Defalcations, Swindles, and Fraud

The King's Student Law Review 2018; Volume IX, Issue I The King’s Student Law Review Title: Defalcations, Swindles, and Fraud: Ungentlemanly Capitalism in Victorian Babylon, 1800 – 1899 Examining the Need for Revision of Cain and Hopkins’ Model of Gentlemanly Capitalism Author: Jake Jacobs Source: The King’s Student Law Review, Vol. 9, Issue 1, 31-52 Published by: King’s College London on behalf of The King’s Student Law Review All rights reserved. No part of this publication may be reproduced, transmitted, in any form or by any means, electronic, mechanical, recording or otherwise, or stored in any retrieval system of any nature, without the prior, express written permission of the King’s Student Law Review. Within the UK, exceptions are allowed in respect of any fair dealing for the purpose of research of private study, or criticism or review, as permitted under the Copyrights, Designs and Patents Act 1988. Enquiries concerning reproducing outside these terms and in other countries should be sent to the Editor in Chief. KSLR is an independent, not-for-profit, online academic publication managed by students of the King’s College London School of Law. The Review seeks to publish high-quality legal scholarship written by undergraduate and graduate students at King’s and other leading law schools across the globe. For more information about KSLR, please contact [email protected] © King’s Student Law Review 2018 The King's Student Law Review 2018; Volume IX, Issue I Defalcations, Swindles, and Fraud: Ungentlemanly Capitalism in Victorian Babylon, 1800 – 1899 Examining the need for revision of Cain and Hopkins’ model of Gentlemanly Capitalism Jake Jacobs ‘Go where you will, in business parts, or meet who you like of business men, it is – and has been the same story and the same lament. Dishonesty, untruth, and what may, in plain English, be termed mercantile swindling, exists on all sides and in every quarter’.1 In 1993, the noted historians Peter J. Cain and Anthony G. Hopkins published the first edition of British Imperialism: Innovation and Expansion 1688-19142, a milestone in the study of imperial history. Cain and Hopkins’ thesis centred around the notion of gentlemanly capitalism, itself a response to the formative research of Ronald Robinson and John Gallagher. Their model inspired a large body of scholarship including two companion readers and numerous essays.3 Despite the impressive breadth and depth of British Imperialism, there are areas of the model of gentlemanly capitalism, which have only been given cursory attention by the authors. One such area that is fundamental to the model propagated by the Cain and Hopkins is the supposedly pervasive values of trust and honour which they argue characterised the gentlemanly capitalists. Such assertions are incompatible with contemporaneous observations such as those of the popular magazine, Town Talk, quoted above. This dissertation explores this fundamental component of Cain and Hopkins’ work further through a discourse analysis based on original primary source research. It aims to inspire further interrogation of the thesis of gentlemanly capitalism in an effort to ensure the integrity of a model that underpins contemporary understanding of the British Empire. At a time when Britain is gripped by geopolitical uncertainty and a crisis of identity, such an endeavour is both pertinent and necessary. * Jake Jacobs, War Studies BA dissertation; King’s College London. *A Brief Note of Thanks*: It would be poor form for me to fail to acknowledge the significant role the following people have had not just on this essay but on my academic career to date. Firstly, Christopher Coker of the LSE; Maeve Ryan, John Bew and the rest of the Grand Strategy cohort at King's College London; Rudra Chaudhuri and Alan James for their encouragement to pursue publication of this piece and lastly; my wonderful, supportive family to whom I am forever indebted. 1 ‘Finance, Frauds and Failure,’ Temple Bar: A London Magazine for Town and Country Readers 17 (1866) 393. 2 They have since published two further volumes. This dissertation is based on the latest: A. G Hopkins, P. Cain, British Imperialism: 1688-2015 (Routledge 2016). 3 See for example, J. Gallagher, R. Robinson, ‘The Imperialism of Free Trade’ (1953) 6 The Economic History Review 1, 1-15; D. K. Fieldhouse, ‘Gentlemanly Capitalists and the British Empire’, 22 Journal of Imperial and Commonwealth History 3 (1994) 531-41; J. Darwin, ‘Imperialism and the Victorians: The Dynamics of Territorial Expansion.’, English Historical Review (1997) 614-42; R. E. Dummett, Gentlemanly Capitalism and British Imperialism: The New Debate on Empire (1999); M Lynn, ‘British Policy, Trade, and Informal Empire in the Mid-Nineteenth Century’, in A. Porter (eds), The Oxford History of the British Empire: Volume III: The 19th Century (1999) 101–21; 118–19. 31 The King's Student Law Review 2018; Volume IX, Issue I I. INTRODUCTION People said that Mr Melmotte had a reputation throughout Europe as a gigantic swindler,—as one who in the dishonest and successful pursuit of wealth had stopped at nothing. People said of him that he had framed and carried out long premeditated and deeply laid schemes for the ruin of those who had trusted him, that he had swallowed up the property of all who had come in contact with him, that he was fed with the blood of widows and children. Anthony Trollope, The Way We Live Now (1875) Upon returning to London from abroad, Anthony Trollope was appalled by the greed and deceit the financial scandals of the 1870s exposed.4 ‘Magnificent in its proportions,’5 Trollope drew inspiration from the rife dishonesty, and fraudulent practices in constructing the central character, Augustus Melmotte, of his classic novel The Way We Live Now.6 Trollope was not alone either in his disgust at the state of the City of London or the literary inspiration he took from it. The character Mr Merdle of Charles Dickens’ classic work, Little Dorrit, was based on the defalcations and consequential suicide in 1856 of John Sadleir, a wealthy financier, and MP of Carlow. The case of Sadleir was not unique to Dickens who, in 1860, recorded a succession of almost unbelievable, interconnected instances of embezzlement and financial fraud.7 The Victorian City of London familiar to Dickens and Trollope provided different inspiration to the economic historians Peter J. Cain and Anthony G. Hopkins, who published the first of a series of essays on the spread of British Empire over thirty- five years ago.8 The essays, themselves responses to the seminal work of Ronald Robinson and John Gallagher,9 were ultimately synthesised into one magisterial work, British Imperialism: 1688-2000, in 1993 (the latest edition was published in 2016 and expanded to include the period 2000-2015). Cain and Hopkins’ central thesis argued that non- industrial forms of capitalism, primarily those in the ‘invisibles’ sector (such as insurance and banking), had been largely neglected by scholars of empire, legal history studies, area studies, and economic history. Furthermore, they argued that more than just acting as a minor contributor to the wider economic milieu of the time, the invisibles sector was much more important regarding output and employment than standard interpretations of British legal history had previously argued.10 Their model for explaining the evolution of British imperial influence consists of several distinctive elements: the primacy of the metropole as the genesis of impulses which drove the expansion of the British Empire; the role of the service sector, rather than commercial or industrial sectors, as providing the momentum for colonial expansion; the confluence of the landed and city elites; and the defining characteristics of gentility.11 4 Booth (1947) 294. 5 Ibid. 6 Ibid. 7 C. Dickens, ‘Convict Capitalists’, 6 All the Year Round 3 (1860a) 201-4; See also C. Dickens, ‘Very Singular Things in the City’, All the Year Round 3 (1860b) 325-26. 8 P. J. Cain, A. G. Hopkins, ‘Gentlemanly Capitalism and British Expansion Overseas I. The Old Colonial System, 1688- 1850’, 39 The Economic History Review 4 (1986), 501-25. 9 J. Gallagher, R. Robinson, ‘The Imperialism of Free Trade’ 6 The Economic History Review 1 (1953) 1-15. 10 A. G. Hopkins, P. J. Cain, British Imperialism: 1688-2015 (Routledge 2016) 43-44. 11 Ibid., 45 32 The King's Student Law Review 2018; Volume IX, Issue I Despite its tremendous breadth and depth, there are several factors which British Imperialism pays only cursory attention to, hints at, or neglects entirely. R. E. Dummett in, Gentlemanly Capitalism and British Imperialism: The New Debate on Empire, highlights the lack of attention Cain and Hopkins afford the role of Christian humanitarianism as a ‘civilising’ factor, facilitating the spread of British influence.12 Moreover, the Caribbean, a hub of trade and commerce for Victorian Britain, is also neglected by the authors. Research on these areas, however, would provide merely additional insight to the overall thesis. Neither subject is essential to the model of gentlemanly capitalism forwarded in British Imperialism. As opposed to these areas of further thematic and geographic research, the characteristics of the gentlemanly capitalists themselves are fundamental to Cain and Hopkins’ paradigm. Nine pages of British Imperialism are dedicated to defining this core aspect of the thesis.13This paper provides a detailed profile of the ‘gentlemanly capitalists,’ the primary actors who galvanised the service sector at the centre of Cain and Hopkins’ model. This dissertation specifically examines the elements of honour and trust which, according to Cain and Hopkins, were fundamental to this community and underpinned the spread of British influence. This notion, foundational to British Imperialism, is summed up in the following passages (emphasis added): Gentlemanly ideals were vital to the success of the activities discussed here because they provided a shared code, based on honour and.

Load more